Country house market shows signs of bottoming out, while wider prime regional performance is reflective of Budget impact
Frances McDonald, Director, Residential Research
The pace of prime property price falls across the UK improved in the final quarter of 2025 as the changes to taxation of high-value homes were better than feared. This caused some pent-up demand to be released and resulted in a ‘post-Budget bounce’ in activity.
Regional markets have also been supported by falling mortgage rates, resulting from four Bank base rate cuts throughout last year. Values fell by a modest -0.6% in the three months to December, compared with declines of -1.4% in Q3, leaving them down by -3.9% in total during last year.
Scotland was the strongest-performing prime market in 2025 and is the only part of the UK where values have held steady throughout the year. This growth has been largely driven by Edinburgh City, the strongest regional market, with annual growth of 2.1%.
Prime markets in the Midlands and North of England also performed better than their southern counterparts, as generally lower average values mean the impact of rumoured tax changes was more subdued.
Coastal markets continue to contend with a number of tax and policy changes, but even here, prices fell at a much slower rate than earlier in 2025, by -1.5% in the final quarter.
Similarly, the country house market, which experienced some of the most significant price falls in 2025, has also seen the pace of price declines ease in the final quarter. Prices fell by -0.6%, a marked improvement on the -2.8% and -4.2% falls recorded in Q3 and Q2, respectively, signalling that this market is starting to bottom out. But despite falls easing, values remain -8.2% lower on an annual basis, meaning there is notable value on offer.
Top end activity was also impacted in the lead-up to the Budget, and net agreed sales above £1 million in December remained subdued across the regional markets, according to data from TwentyCi.
New instructions recovered to within 3% of the levels seen in December 2024, which also indicates refreshed confidence from sellers, which is likely to continue this year, particularly as the typically busy spring market approaches.
Throughout 2025, there were broadly the same number of net agreed sales above £1 million across the regional markets as there were during 2024. At the same time, there were 18% more price changes to marketed properties, highlighting the price-sensitive nature of the prime housing market last year.
Our December buyer and seller survey suggests that sentiment improved significantly, but there remains some caution, particularly for more discretionary second-home and investment purchasers.
Following the announcement of the High Value Council Tax Surcharge and the reduced likelihood of any further changes to the property tax system, we expect more stability for prime property prices this year. Coupled with a relatively stable mortgage market and the expectation of further Bank base rate cuts, activity levels are also likely to be less volatile, with buyers and sellers planning accordingly now that they have more confidence.
In light of ongoing economic uncertainty and the likelihood that the new property tax thresholds will take some time to become embedded, short-term prospects for price growth are muted.
Read more about our latest five-year prime forecasts here.
Prime regional forecasts for 2026–2030
< View our latest Q4 2025 updates here.
For more information, please contact your nearest regional office or arrange a market appraisal with one of our local experts.
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